Into the Wormhole

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This is a podcast episode titled, Into the Wormhole. The summary for this episode is: <p>This week on the <strong>Jump Off Point: Crypto</strong> edition, we’ll be welcoming <strong>Dave Olsen, President and Chief Investment Officer of Jump Trading Group</strong>, and <strong>Kanav Kariya, President of Jump Crypto</strong>, to discuss the events surrounding the Wormhole hack last week. Dave and Kanav will take you into the room when the hack was identified, walk through the thinking behind replacing 120,000 of stolen ETH, and explain why they believe Wormhole is essential infrastructure for the crypto ecosystem.</p>

Speaker 1: Welcome to The Jump Off Point Crypto. Today we're taking a different approach to the podcast by welcoming Dave Olsen, president and chief investment officer of Jump Trading Group, and Kanav Kariya, president of Jump Crypto, to discuss the events surrounding the Wormhole hack last week. Dave and Kanav will take you into the room where the hack was identified, walk through the thinking behind replacing 120, 000 of stolen ETH, and explain why they believe Wormhole is essential infrastructure for the crypto ecosystem.

Dave Olsen: It's been a hell of a week in DeFi. It's been a hell of a week in crypto, and certainly here at Jump, we've been in the middle of a lot of that. So last week, we found ourselves in the middle of one of the biggest attacks in DeFi, which was the exploit that was perpetrated against the Wormhole protocol and the theft of 120, 000 Ether in the matter of maybe 20 to 40 minutes. And we wanted to address what happened, give all the listeners a chance to understand from the inside the moment by moment detail of how we saw the exploit go down, the actions that we took with the entire Wormhole community to repair and patch the vulnerability that existed, and explain some of the questions that have emerged in social media channels about why Jump was involved. So, my name's Dave Olsen. I'm the president and chief investment officer at Jump Trading Group. Jump Trading is an organization now with over 1000 people globally. We've been in business for over 25 years. We trade all markets around the world that can trade electronically, and our roots are as traders in the futures markets in Chicago, and we quickly grew through that period into other asset classes, other strategies. And several years ago, we were one of the first participants to enter the crypto markets with modern trading techniques. I work very closely with my partner, who's also with me today. Why don't you introduce yourself and give a little background on what you do?

Kanav Kariya: Hey guys, I'm Kanav Kariya. I'm the president of Jump Crypto, which is the crypto division of the Jump Trading Group. As Dave mentioned, Jump has been in the crypto business for over six years now. The effort started as a concourse works project out of a lab that we have at the University of Illinois, where working with professors and PhD students on a bunch of interesting projects. There was mining rig in the closet. There was VR project to abstract away the wall of trading screens. There were machine learning and networking projects. And amongst that, Jump found a way to create a sandbox trading problem to explore its interest in the crypto space. The crypto business has come a long way since. We're over 140 people on Jump crypto now, but we've really tried to stay true to that spirit of innovation and the scrappiness that we had back down at the lab in Illinois. The way I like to describe our business today to people is primarily spread into two buckets. One is prop trading, which is exactly what we do on the other side of the house, where we build quantitative models and deploy them at global scale with participation in crypto markets. And the second piece, which will be the focus of the conversation today, and is now even deeper at the core of the crypto business is the build and strategic piece, where we're involved in the crypto ecosystem in investing in interesting projects and in partnering with some of the best protocols in the space. We came out with the Jump Crypto brand some time last year, to start more publicly talking about some of our efforts in this space. And some of the projects that we've more publicly associated ourselves with have been the Pit Protocol, which is financial data Oracle on the Solana network, that is there, which is creating a decentralized stablecoin product on its application specific blockchain, that is the Oasis network that offers privacy preserving computation over encrypted data sets that has applications in the healthcare space. There are projects within exchange on and off ramps in the developing world. And there are infrastructure plays that we've been deeply involved in. Of course, the one that I haven't talked about yet is Wormhole, which I'm sure we'll have the chance to explore a lot more deeply in this conversation.

Dave Olsen: Yeah. That's why we're both here today. After all, it's been an exciting start for Wormhole in terms of traction, in what it's enabling in the DeFi community. Why don't you dive us right into what is Wormhole, where did the idea come from, and what role we see it playing in the whole DeFi space.

Kanav Kariya: I'll provide a little bit of context around how Wormhole came to be for the project that it is today and describe it. And hopefully that should serve as useful guide. So Wormhole was originally conceived as a Solana Hackathon project by the inaudible team to be a bridge between Ethereum and Solana to enable the flow of assets across those ecosystems. As we acquired inaudible last year, together we came up with this new, far more powerful vision for Wormhole as a genetic communication bridge between a number five value blockchains. And what that means is that Wormhole is a bus via which all kinds of information, including assets, NFTs, Oracle data, governance, sports, and other information can flow between all the connected ecosystems in the Wormhole network. Wormhole is a completely decentralized protocol. It has 19 guardians that make up its network and any data or information that has to flow across these ecosystems has to be attested to by two thirds of these guardians. Wormhole today connects Solana, Terra, Ethereum, Oasis, and a number of other high value chains with more coming into the fold.

Dave Olsen: That's important to recognize that even though Wormhole had its roots coming out of a Solana Hackathon, it really is layer one agnostic and completely cross- chain without any central layer.

Kanav Kariya: Absolutely. Yeah. It's chain agnostic and information agnostic. And so it's not limited to be an asset bridge anymore, as it used to. It's a completely generic bridge to facilitate all kinds of interesting CrossGen applications.

Dave Olsen: To me, one of the coolest things about the Wormhole protocol is the fact that this allows layer one blockchains to really focus on their comparative advantage and not try to be all things to the entire community all at once. So you could imagine layer ones that have got extremely performant characteristics, and have got great throughput and very high transactions per second, serving one purpose. And you can imagine another blockchain, that's got a fantastic community that's rallied around it. Ethereum probably being the best example of that so far. And instead of the Ethereum blockchain, trying to figure out how do we go from 10 or 15 transactions per second to a 100, 000, you can use the NFT that you got on Ethereum, and you can bridge that through Wormhole into Solana where there might be a higher performance app that you want to get exposure to. So that ability for a cross- chain environment, for each of the chains to do what they do best, and then have internet connectivity between them, really is one of the more exciting things that's happening in DeFi, in my estimation.

Kanav Kariya: Two great applications of this that we already see out in the world is the ability to mint NFTs on the Solana blockchain that lets you do it cheaper, faster, and in a more green fashion. And then bridging those NFTs over to Ethereum, enable them to be exposed to a much bigger audience. Traditionally, the USD asset that's created by the application specific Terra blockchain, and then being able to represent this stable source of value, and use it to transact across the broad crypto ecosystem.

Dave Olsen: With a lot of the press surrounding the hack last week, Kanav and I wanted to get together and talk about the hack. Can you just describe in some more detail, like what was the vulnerability and what were the technical steps that the attacker needed to follow?

Kanav Kariya: The contract on the Solana blockchain that manages the minting of rep tokens was the contract that was exploited here. Wormhole's token bridge, which is called The Portal, looks for deposits on the Wormhole contract on the Ethereum chain to interact versions of Ethereum on the Solana blockchain that can then be used to collateralize various activities and participate in the Solana DFI ecosystem. The contract that mints the Solana wrapped ETH had not appropriately validated all the inputs that would need to verify that the signatures were in place. And the attacker was able to spoof such a signature that's called a VAA in the Wormhole context to mint additional ETH.

Dave Olsen: Basically they forged the check.

Kanav Kariya: They forged the check. That's exactly right. They forged the check and they cashed it in. And we had 120, 000 extra ETHs in the world. They probably had to do a fair of reverse engineering on the protocol. They had to find an edge case vulnerability that the audit firm, all the developers and everyone else outside there in the wild for the last seven months hasn't seen. The vulnerability was completely patched within four hours, which was an incredibly quick response. And it involves large number of steps. It requires identifying the vulnerability, testing all the fixes in local environments and getting them validated by the broader audience to ensure that it doesn't cost further harm, and then having it onto the network. And being able to pull that off under extreme duress and stress was in my opinion an incredibly impressive feat, and one that I come away looking at positively from this rather unfortunate situation.

Dave Olsen: So the moment that I found out that something was a foot, we had a group in Miami that had assembled to dig deeper into some of the research and some of the project work that we're doing in Jump Crypto. I'd say that there were at least two dozen of us down there. We all converged on south Florida. I was sitting on steps of a building with my iPad in my hand zoomed in to the conversation that was happening in the room. And I heard an interruption in the meeting where one of our colleagues asks for our director of compliance and financial crime and AML to step out of the room. And I thought, that's not something that is requested all of the time. And that's the moment that I understood that we had a fast developing situation. But take us back into, like, where were you at the moment that you found out, what were you doing, and what were the first thoughts that ran through your head?

Kanav Kariya: Yeah, one of our developers flagged that there was a potential inconsistency in ETH balances, and a bunch of people hopped on a Zoom that was started on a quick Slack. And you jump onto these Zooms and you don't expect it to be 120K ETH hack ever. And as we were investigating things and investigating transactions, we quickly started bringing a lot of developers onto the chat preemptively called the audit and security firms and brought them on and quickly established that there had been a breach and that there was a vulnerability in Wormhole that had been exploited. While we were raising the transactions and trying to get a full sense of the impact of this, the Wormhole community managers that had also joined that Zoom call quickly alerted all the guardians and asked them to shut down the notes so that we could try to prevent any potential further damage. That definitely felt like a big punch in the gut. Everyone was quickly in problem solving mode, trying to figure out, what next steps we could take in quickly assessing what damage control was possible.

Dave Olsen: Inn this kind of situation, there's a fog of war element to it where you're not sure is this over, do we have continued vulnerability? What other vectors might be out there? Where in that timeline, did we understand, all right, we've got the door shut, we've protected the rest of the network, and now we're dealing with the aftermath, versus we've got an ongoing situation where there's continued risk here?

Kanav Kariya: Yeah. The fog held for a while. There's a lot of moving pieces with something as involved as Wormhole. By the time you got the call, and by the time our director of compliance was pulled out was relatively, still early days. And the fog wasn't fully clear until the vulnerability was fully patched a few hours later. Though, a lot of potential damage was mitigated as soon as the network of guardians was able to get their nodes down, which probably took, say about 20 minutes. And that's the cost you pay for decentralization, but there is a lot of community overhead that goes into making these scans of actions.

Dave Olsen: After the exploit was identified and we got the patch in, we were then left with the question of, okay, we've seen a compromise of 120,000 ETH. We've got a community that is going to want answers on how does this affect them? There's a lot of composability already stacked on top of Wormhole. A lot of those partners were wondering, okay, how does this impact my project? There's an interconnectedness there that was always a high priority at Jump Crypto. The initial decision making process that we underwent to make the decision to step up and replace the hundred 20,000 ETH, I would say that was end to end less than an hour?

Kanav Kariya: Sounds about right. Yeah. And not say the exact position centering around just the conversation to purchase, it was maybe even a little bit shorter. We have game played certain scenarios where very high conviction bets that we've made in the space come under inaudible. And we were mentally prepared to step in and provide support when needed. Of course, you can never make a decision of that magnitude very easily, but quickly it became clear that was going to be the right decision to make given the time horizon that we wanted all the ecosystems involved to mature in.

Dave Olsen: Yep. And I think that the people are getting to know more about Jump Crypto. We're first and foremost builders, but we also sit at top of global 24/ 7 very sophisticated trading operation and crypto allowed us to activate all of those channels that we've got globally. Procure the coins in very short order without having a big liquidity impact hitting the market and a big price impact that resulted from such a material purchase in such a short period of time.

Kanav Kariya: Yeah.

Dave Olsen: A question that we've heard from a lot of folks is, did Jump Crypto have to do anything? Were we obligated in some way? Did we have some responsibility to put funds into Wormhole given the compromise? The answer to that is no, we chose to use our own funds to shore up the stolen 120,000 ETH, and we knew that we needed to act quickly and decisively in order to shore up the system. I think the way we got to that decision, though, it really does trace back into the history of Jump Trading and who we are as a company, and the way we think about risk, and the way we think about complex systems. We've been in business for over 25 years. We've cut our teeth in the future's pits and in the markets in Chicago. But very quickly from that point, started to evolve into a company that was dealing with the most complex computational environments, the most complex networking environments, and further into machine learning and AI to develop Alpha. So our expertise is in managing, and modeling, and thinking about edge cases for very sophisticated global networks that are operating not just within our own data centers, but interacting in a very diverse financial market climate.

Kanav Kariya: Absolutely. I also wanted to underscore the fact that the network that we've established in crypto was one of the primary reasons we were able to move so quickly and respond to not only getting the assets, but then also alerting all the regulatory agencies, the exchanges, all the partners that we have across the crypto community, have informed enough bodies and connections to make that information move quickly and make decisions was huge, and something I've only come to appreciate after the fact. Speed was critically important. Wormhole has a lot of adoption across many major ecosystems across a lot of applications. Failure to respond quickly could have led to a lot of uncertainty, cascading liquidations, and poor consequences for the market. And the fact that we made the decision to step up quickly and make this whole, assured the community doesn't detract at all from the fact that we're going to do everything we can to see this event through.

Dave Olsen: Yeah. We're hopeful that is a quick conclusion, but we're ready for a multi- year effort to continue to keep the heat on, and to ultimately recover these funds. We've positioned ourselves and have really been impressed with the way that exchanges, and payment providers, and wallet managers were immediately available to start to close off corridors for those coins to travel. That was a near immediate response from partners that stood ready to do anything they needed to do to help in this effort. That was really one of the finer moments coming out of this. So many platforms were willing to drop everything and help us out.

Kanav Kariya: Yeah, it's part of the crypto community and the ethos that the whole space is developed. Every partner that we've had in this space, all our greatest competitors in traditional finance, all our counterparties and our peers stood out to support incredibly strongly off the bat.

Dave Olsen: One of the things that we've seen some speculation out there in the market about is, where did this money come from? Was there some kind of a loan involved, one theory out there was that somehow these were assets Jump Crypto had in custody and then put those into saving Wormhole. None of those theories are true. In the simplest terms, it's just Jump's capital. This was cash that we had on our books at Jump Crypto available for use as we saw fit. We went out and purchased 120,000 ETH and then contributed those ETH into the loss of the Wormhole contract. It's about as straightforward as you can get. The cash was ours. The decision making around using that cash was streamlined, and we saw an opportunity to step and bolster a project and an ecosystem that we're big believers in, and end-to-end that decision took minutes, not hours.

Kanav Kariya: The 20 minutes that it took us to make the decision didn't allow us to put together a consortium to put a deal together.

Dave Olsen: I think when many folks look at this kind of capital injection to help a project that has gotten a vulnerability, a lot of people think, okay, what did you guys get in return? I think it's going to surprise a lot of people that listen to this podcast, that there really was no quid pro quo. There was no commitment of equity, or tokens, or any other offset to the injection. That is tough for people to get their head around.

Kanav Kariya: Wormhole is a very critical piece of infrastructure. It's no secret that we acquired Certus One about a year ago that built the first version of the Wormhole. Of course, we have a vested interest in the success of Wormhole as a piece of infrastructure in all the ecosystems that it connects. And the time horizon that we're playing in crypto is pretty long, and it was just the right move to make, to ensure that these young ecosystems had the opportunity to develop and for our bets to mature over the long haul.

Dave Olsen: Yeah, the way I looked at it in the moment and the conversations we had before we pulled the trigger were not about, how can we parlay this into some additional benefit that would come from the Wormhole project? It was much bigger picture than that. We believe in a cross- chain ecosystem. We have a lot of partnerships that frankly we're going to do very well from if they're successful, that are dependent upon across- chain world.

Kanav Kariya: Yeah. We're playing with skin in the game. We come from roots and trading. This was a giant bet to make, and one that we hope will pay off very well. I'm glad you underscored that to clear up any questions on intentions.

Dave Olsen: Yeah. Crypto and DeFi in particular is a pretty tight community driven culture. There is` definitely a community spirit within DeFi. And the idea that if there's a crisis, you run to trouble, that's something that we've seen in other instances in DeFi, but our decision to use our own capital, buy the ETH ourselves and contribute that ETH into Wormhole was fundamentally an investment decision. We decided that the entire cross- chain ecosystem for DeFi was collectively going to be more valuable and more valuable to us than spending$ 325 million to buy Ethereum tokens on a Wednesday afternoon. So this was an opportunity for us to keep building and for this market to keep scaling. And all the participants, including us are going to benefit from that. Another question that we've heard is, what in the world is going on with Jump Crypto that you guys have that much capital to begin with? And some historical perspective is in order in thinking about how we position ourselves with this kind of balance sheet, really from the get go. And you and I were both involved very early in the crypto effort at Jump, but some don't appreciate exactly how early that was.

Kanav Kariya: We started investing in crypto when ETH was under a dollar, and we've always had a philosophy of aggressively reinvesting in our business. And that allows us to not only capitalize on opportunities that come up, but also take big punches like this on the chin and keep moving forward.

Dave Olsen: So we've been fortunate to have some good runs over our 25 year history. A lot of firms would be tempted to pull that capital out of the business. Our instinct at every turn has been to really double down and try to find the next frontier with the earnings that we've been able to generate to that point. That's what led us initially to fill up the tank and really involve ourselves, especially in the early days of crypto, and even now it's an extremely capital intensive endeavor. And the combination of being an early investor in a lot of coins, and tokens, and projects that we thought had promise. There's been a combination of being early and aggressive that's led to substantial appreciation of those assets, and the desire to keep that money in the business and ready to go for the next opportunity, or a moment like this, where we've got to step in and help. So I think without those two philosophical bearings, we would not have been in the position to take this type of action the way we did. Obviously security is the theme that is underlying all of this. I think it's probably important for us to share the amount of resources that we're already brought to bear on iterating through a tighter and tighter capability on security for Wormhole prior to the incident. And then certainly, what the post incident response is to make sure that this sort of thing doesn't happen in the future. And it's obviously multi participant. Many of the most capable blockchain engineers in the world are focused on it. But I think we should probably elaborate a bit on, how do we make this stronger coming out the other side from an incident like this?

Kanav Kariya: I'd like to start off by highlighting that Wormhole was built by some of the top security minds in the crypto space. The folks that have built Wormhole were deeply involved in finding game ending zero days on some of the top ecosystems that we see today, including Cosmos and Solana. The protocol was audited by Neodyme, which is the top auditing firm on the Solana ecosystem. And yet, somehow this vulnerability existed out in the wild for seven months, and that's the reality of a lot of these things. But the Wormhole team has been following best practices on testing, on deployments, on auditing every changes it comes out the door. And going forward, all those things continue to be true. In fact, before the vulnerability, about two weeks before a whole fresh round of audits was kicked off that could very well have also found this vulnerability and applied to patch to it. Those audits are underway and many others are lined up in a continuous fashion. More alerting and monitoring infrastructure is being put into place by the Wormhole team to be aware of these issues even more quickly as they happen. There are certain account and security related upgrades that are going to be detailed out on a roadmap that's going to follow next week. And there is increased vigilance from the community at large. We've seen a large number of dev teams of their own accord going through their code base and adding comments and questions in the days following the incident, which has been awesome to see.

Dave Olsen: Do you think that we're going to see any structural changes to the way Wormhole operates, for example, throttling of total value, moving through the Wormhole, or some sort of mechanism that would give the guardians a chance to take another look at it?

Kanav Kariya: Defense and depth is always the mantra with all things security. It's harder to raise and about in the context of blockchains, because every time you add new code and new logic, it increases the attack surface. The one that that was found last week was a smart contract book. It had nothing to do with the trust assumptions, the logic, or the architecture of the design that we had in place. And when you do add additional logic, it makes it increasingly harder to reason about, and there's definitely more risk mitigation practices that can be put in place, including classic trading approaches of throttling and other tools that can at least minimize damage in events where these things do happen. And they are part of the roadmap that will be made our industry.

Dave Olsen: The fact is we are still aggressively pursuing our loss here and the funds that were stolen. Do you want walk through just how ambitious that endeavor is?

Kanav Kariya: Absolutely. The effort started right from get go. As soon as we identified the vulnerability, we sent an on chain message to the attacker offering a$ 10 million reward for the return of the funds. That message has not been answered as the time of this recording. We also have a$ 10 million bounty out to the community for any information leading to the recovery of these funds. We're working with the government, with private investigators, and with the community at large to identify any leads we can to lead to the successful return of these funds. We've indulged in on chain forensics ourselves, which we're quite familiar with and are working with a lot of teams in this space that also have some very creative ideas to trace the funds back.

Dave Olsen: Yeah, I think there's obviously the ability to recoup the monetary loss, that's motivating for sure. There's also a commitment to justice here that probably goes even beyond economics, and fuels our desire to work with the appropriate authorities and investigative teams, if necessary over a multi- year period of time, where we spend more money to have the resources available to continue to chase the trail of these funds. And I think it's worth identifying, let's say the positive scenario works out and the funds are recovered. Something like the terrific field work that was done by the FBI in the Bitfinex attack.

Kanav Kariya: Dave, we've been through the fire this last week. That's been a lot of sleepless nights. It's been high emotions, but ultimately in my view a well handled situation. Looking back though, now that we have the benefit of some perspective, what are the biggest learnings that you've been able to take away? And what have you been going to bed thinking about at night?

Dave Olsen: Yeah, the first is that these projects are ambitious. This is hard work. There are risks. We identified those and had responses that we thought about from various different attacks. You never predict exactly what's going to happen, but we are going through a period of iteration where every protocol that's out there gets stronger every day. There are a lot of eyes on it. There are people working globally to strengthen these capabilities and these code bases and the logic that's used. It's very cool to see if not quite crowdsourced, certainly decentralized effort with everyone pulling in the same direction. And I think that for DeFi to be as resilient as it needs to be for where its growth is going to, that's got to continue. We believe that our blockchain engineers and our dev talent is going to be a big contributor to that going forward, but we're not going to be alone in that. Obviously our philosophy of having a lot of dry powder, because you don't know what might come up, either on the opportunity side or the threat side, that's a lesson that we are thankful that we've learned a few times before and we're ready to go this time. And I think the ability to be transparent. And like you said, hop on a Zoom call with folks from around the world, all trying to figure out the same problem, all trying to make sure that the patch is effective before it gets rolled out, trying to coordinate with all those guardians. A lot of that is a result of the community building effort that the entire industry has been underway on for the last several years. You can't just do that magically when you need it. That's a daily investment that you've got to make.

Kanav Kariya: It's all part of the hardening process for this industry as a whole. The best parts of the internet and the most secure pieces are built on large open source code bases that have been through the fire for decades, and cryptos are along a similar arc now. It's exciting and very promising new technology. And the scale of capital participation and interest in it has continued to scale up, and in my view is a sign of the increasing majority in the space.

Dave Olsen: Yeah. We'll see what this looks like in the rear view mirror, when maybe we're back down in Florida and we're relaxing by the pool instead of watching iguanas fall out of the trees, because it was so cold. It's a pretty good environment of work in rather than anything else when we were there.

Kanav Kariya: Yeah.

Dave Olsen: This is potentially an inflection point in the evolution of DeFi. What are you most excited about that's going to come next, when you've got your optimistic hat on about how far this can run? What are you most excited about?

Kanav Kariya: I always have an optimistic hat on. The thing about DeFi that's always excited me the most is the pace of innovation with which market structure and products can evolve. And I credit that almost entirely to the export of trust to the chain. In the traditional financial environment, the pace of innovation has been slow and it continues to be slow. And a lot of that has to do with the fact there are a web of intermediaries that need to be established between the buyer and seller for the express purpose of creating trust. Once the matching engine completes the match, there is the clearing house, the FCMS, the DCMS, and all the other three that acronyms that I can't recall right now, that are needed for the only purpose of establishing that the trade between the buyer and the seller actually settles. With crypto, the match is the settlement and the trust of that settlement is exported to the underlying blockchain, to Ethereum, to Solana and many others. If you think about the raw market structure of the Ethereum blockchain just one year ago, and this will probably be a little bit more familiar for folks familiar with how traditional financial markets work, where the matching engine prioritizes orders based on both their price and the time that they came in on. The Ethereum client prioritized orders randomly the same price. And so I liken that to the open art carpets where you just had to be the loudest and the biggest, and you had a pseudo randomly high probability of getting selected. And so the behavior that was incentivized was to stuff the box with as many transactions as you can, which led to network congestions and bad behavior. And one developer just came in and added a couple line change to the Ethereum client and just proposed to the community that it just orders these things by time in addition to price, and that solved congestion. And now it converts it from this open art cry market into fight for matching SBC today. And this is not a developer that worked for the foundation, for anywhere else as a community member. Actually a fun factor is this was Hendrick from Certus One. And there you have an evolution of market structure as step one. A few months later, we see MEV really becoming a big topic of focus and flash bots became dominant as part of market structure. And flash bots removes any elements of speed from the race and makes it so that every block effected, it becomes a batch, and the continuous batch options that people have often talked about as a more efficient form of matching, as opposed to price time priority on exchanges suddenly became a reality on the ETH thought chain. And we've seen 10 more experiments since. This dramatic piece of innovation and experiment and evolution in the crypto space is awesome. And we don't know where it will lead us, but we always want to bet on the arc of progression, on the arc of development, and on the arc of the community actually coming up with the best solution through markets, through fire and through development. And that's what excites us our DeFi. And so our vision of DeFi remains still very optimistic and we're committing a lot of resources to helping make it a reality.

Dave Olsen: It's worth spending a second on, all right, where do we go from here? First of all, even though this was a big moment, and important moment, it was no way destabilizing or weakening Jump Capital. Our foot is still on the accelerator and we see a lot of room for innovation and growth and investments. We're excited about looking out over the rest of 2022 and beyond. Kanav, what are some of the highlights that you think of now that we're over the main hump here of getting Wormhole back online, getting it refunded, what do we do with it now?

Kanav Kariya: Wormhole has a very exciting roadmap. There's a detailed document that kind of lays all this out that you can find on the Wormhole website, but the ambitions of the project haven't changed. Building cross- chain infrastructure is really hard. And as a result of being live in the market as this generic solution over the last eight months, the project has been able to receive a lot of feedback from the market and iterate on features that projects need to build across in applications. So decentralized querying accounting models and cheaper at adaptations are on the short term. A lot of new chains are being integrated and a lot of ecosystems are quickly adopting the Wormhole standard.

Dave Olsen: And I think that the quality of the discussions that we've seen among partners and those excited to join us in this effort or continue on with the pace that we've seen so far has been a really rewarding element of what was a tough experience and a tough week. So, a big thank you to all those partner, some of them public with their reaction, a lot of them conversations that we've had directly behind closed doors. It's felt like a rallying cry for builders. We're excited to be one of them, and really excited that we could step up and help in a way when the market needed it most. So looking forward to more straightforward weeks, but certainly a lot of hard work left ahead of us.

Kanav Kariya: Yeah. I really want to give a shout out to the guardian community for their intense support through this process. They were up all night with all the developers and the rest of the community and providing support, looks and code, and in quickly getting the patches in place that needed to be explored.

Dave Olsen: It really does feel like we continue to be at the very beginning of the capabilities that are going to be created and the kind of minds that are training their focus on this space. To me the most exciting thing about where we're going over the next three to five years with DeFi is just how uncharted the potential is, the chance to create really efficient value transfer between parties in a way that could be the leapfrog moment for some areas of the financial system. The way some economies bypassed entirely putting up telephone poles and having landlines, and just went straight to cellular and had a much more efficient way for people to communicate, I feel like that's happening in finance right now. And whether that's going to be a smartphone or what, we'll see, that's still in the lab. But we're glad that we can keep the experiment going. Frankly, we're proud of the role we were able to play over the last week. And we look forward to working with everybody in the community to continue to grind away and eat glass as this market continues to develop

Kanav Kariya: The community response has been truly overwhelming. It's been just awesome to see everyone showing support and reaching out. A lot of developers in this space have asked how they can help with Wormhole and how they can work more closely with Jump. We're working on a lot of cool, exciting stuff, and we're always looking to bring the smartest people on board. Please do reach out.

Dave Olsen: Yeah. You want to be in the room? This is the room to be in for sure. Thanks Kanav, let's do this again.

Kanav Kariya: Thanks, Dave.( Silence).


This week on the Jump Off Point: Crypto edition, we’ll be welcoming Dave Olsen, President and Chief Investment Officer of Jump Trading Group, and Kanav Kariya, President of Jump Crypto, to discuss the events surrounding the Wormhole hack last week. Dave and Kanav will take you into the room when the hack was identified, walk through the thinking behind replacing 120,000 of stolen ETH, and explain why they believe Wormhole is essential infrastructure for the crypto ecosystem.

Today's Guests

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Kanav Kariya

|President, Jump Crypto
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Dave Olsen

|President and Chief Investment Officer, Jump Trading Group